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Making Tax Digital for Income Tax Self-Assessment

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Making Tax Digital for Income Tax Self-Assessment

Making Tax Digital (MTD) is an initiative implemented by HMRC to digitise the UK’s tax system. The primary aim of MTD is to make tax administration more effective, more efficient, and easier for taxpayers to get their tax right.

Making Tax Digital for VAT has now been in full effect since April 2019, which has proven to be a success. Many businesses have benefited from an abundance of digital tools which are continuously developing. The benefits are unquestionably worth the time invested in obtaining and understanding the correct software for you and your business.

MTD for Income Tax Self-Assessment will follow, which was set to be introduced from April 2024, which required all businesses, self-employed individuals, and landlords with income over £10,000 to submit quarterly updates to HMRC with details of their business income and expenditure, using MTD-compatible software.

The Treasury have recently announced that due to the challenges that businesses, self-employed individuals, and landlords face in relation to the economic climate, as well as the amount of work involved with transitioning to MTD, it will be delayed for a further two years until April 2026, for those with income over £50,000 to join first. For those with income over £30,000, it will be mandatory to join from April 2027. 

For smaller businesses, those with income under £30,000, HMRC intend to review and understand how MTD can be implemented to meet their business needs and will provide further information on this in due course.

If you would like to know more about Making Tax Digital or how we can help with the technological change, please contact Jake on 01227 277667 or by emailing him at j.mackenzie@mphaccountants.co.uk.

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